RINCON — Work on a proposed, hotly debated pipeline could start by the end of the year, according to a Kinder Morgan official.
Allen Fore, vice president of the Texas energy company’s public affairs, told Rotary Club of Effingham County members Thursday afternoon that the company expects to submit its permit applications in the next few months.
“We’re probably looking at filing for our permits late this quarter or early second quarter of 2016,” he said.
Pending approvals from the various regulatory agencies, construction on the 360-mile Palmetto Pipeline from Belton, South Carolina, to Jacksonville, Florida, could begin by the end of 2016. The pipeline then could be in operation by the fourth quarter of 2017, Fore said.
The cost to build the pipeline is pegged at approximately $1 billion, and the company expects to employ 1,200 workers in its construction.
Kinder Morgan also is extolling a study, conducted by a University of Georgia economics professor, on the pipeline’s impacts. Jeffrey Dorfman’s analysis said construction of the pipeline will “increase competition in the transport of petroleum products” in southeast Georgia, and the 1.3 million Georgians living in the pipeline’s service area will gain an approximate benefit of $3.9 billion over 20 years. The expected lower prices as a result of the pipeline, Dorfman concluded, could save Georgians $828 million over 20 years.
“We think it’s going to be a very important part of the Georgia economy,” Fore said.
According to the study, the pipeline and its construction will result in $948 million in economic impact provide over 20 years.
The pipeline also will enhance safety, Fore said, because the use of the pipeline will reduce the number of miles trucks will be on the road.
“We’re also talking about a safer way to transport product,” he said. “A lot of the product transported here is by truck. Pipelines are by far the safest way to transport energy. This project will take a significant amount of that long-haul truck traffic off the road. There will still be trucks. But there will be fewer trucks and they won’t have to go as far.”
Fore added that it is cheaper to transport fuel through a pipeline than via long-haul trucks. The pipeline could mean a savings from 5 to 7 cents per gallon, which Fore acknowledged may not seem like much now, with oil prices their lowest in nearly 13 years. However, the U.S. Energy Information Administration is forecasting that a barrel of oil, now under $29, will average $38.54 this year and will reach $47 in 2017.
“Those of us who have been around a while know it won’t last,” Fore said of the lower prices at the pump.
Savannah and Coastal Georgia are restricted on their supply of gas, Fore said, and “having a new source of supply is going to help. We don’t build pipelines and hope someone might use it. You have to have interest from the vendors.”
Critics of the pipeline project have said there has not been a need demonstrated for the pipeline and that it won’t lower gas prices in the Savannah market. Opposition to the pipeline has been widespread and vocal since plans were unveiled nearly a year ago.
Pipeline opponents also have expressed concern over environmental impacts because the pipeline is projected to cross seven different waterways in Georgia.
“Safety is a top priority for pipelines,” Fore said. “We do everything we can to make sure these pipelines are operated safely. There are a lot of safeguards in place.”
Most pipelines are about 3-4 feet below the ground, Fore explained, and when those pipelines cross bodies of water, those structures are generally 50 feet below ground. When a pipeline was built crossing the Mississippi River, it was placed 80-90 feet below ground, Fore said.
In May, state Transportation Commissioner Russell McMurry rejected Kinder Morgan’s application for a certificate of public convenience and necessity. Granting that would have enabled the company to use eminent domain, a power generally reserved for governments.
Fore said eminent domain is rarely granted and also rarely used by the company. Kinder Morgan filed suit in Fulton County Superior Court, appealing McMurry’s decision. A ruling is expected sometime early this year.
A film on the Palmetto Pipeline, “At What Cost?” has been shown recently and documents the opposition to the pipeline. Several environmental groups, including a coalition of Riverkeepers and others have formed the pushbackthepipeline.com website.
“That’s a movie. We have a study,” Fore said. “We want to focus on facts and the future and the specifics by respected academics. We’re talking about real important issues that involve economic development, energy security, domestic energy independence. These are real things, in the billions of dollars, in to helping make sure Georgia stays competitive.”
The company usually gets 99 percent of the landowners to work with it voluntarily. The rate of access so far is nearly 90 percent on the Palmetto project, Fore said.
“We’ve had great success with landowners on this project,” he said. “They allow our experts to come on their property and conduct environmental, cultural and civil surveys to determine the appropriateness of putting pipeline there. It generally leads to a discussion and a real-estate transaction where we would pay the landowner for permanent access.”
Most of the pipeline’s path, about 80 percent, will be co-located with an existing right-of-way, either a pipeline already in place or a utility easement, Fore added.
The company generally asks for 50 feet of right-of-way from private landowners, and it will pay for the permanent access and a temporary access point to get the equipment on site, according to Fore. It also asks that no permanent structure be placed on top of any granted easement, though the land can be used for other purposes.
If the pipeline is approved, it will carry about 150,000 barrels per day at its start. A terminal will be built in Richmond Hill in an industrial park, where a new interchange is being developed. With other truck traffic expected there, Fore said there are plans for a truck lane.
The final route for the pipeline will be part of the permit process. Fore said the company talks to about 20 landowners a day about potential surveys of their land.
“For every project, we’re always making route adjustments,” he said. “Our land agents are talking to landowners. We’re making very good progress. The reality is, we’re getting good reception from the people who are actually impacted. The people who are closest to this are the people the pipeline is proposed to cross their property. Those folks are the ones we’re having good conversations with. That’s helping us make this a better project and a better route.”